CHICAGO — A recent legal shift involving tariffs imposed under the International Emergency Economic Powers Act (IEEPA) is creating both opportunity and uncertainty for U.S. businesses — including dry cleaners and the distributors and manufacturers that supply them.

Following a U.S. Supreme Court decision that invalidated certain IEEPA tariffs, the U.S. Court of International Trade (CIT) has directed U.S. Customs and Border Protection (CBP) to begin the process of refunding those duties. However, as outlined in a March 19 webinar hosted by the Small Business Legislative Council and shared with the Textile Care Allied Trades Association (TCATA), the path to those refunds is far from straightforward.

First, it’s critical to understand what the Supreme Court ruling does — and does not — cover.

The decision applies only to tariffs imposed under IEEPA authority. Other major trade measures, including Section 301 tariffs on Chinese goods and Section 232 tariffs on steel and aluminum, remain fully intact. In practical terms, businesses should view this as a targeted rollback rather than a sweeping elimination of tariffs.

As webinar moderator Matthew Morgan of Barnes & Thornburg LLP described it, the ruling removes “one layer of the cake,” not the entire structure.

(The law firm presented the webinar as general information only, instructing businesses to contact their own legal counsel regarding their specific position and issues.)

For textile care industry stakeholders, especially those sourcing equipment, parts or supplies from overseas, eligibility for refunds depends heavily on one key designation: importer of record.

Only the importer of record — the entity that officially filed entry documents and paid duties to CBP — is positioned to receive refunds directly. Distributors, operators or suppliers may not have direct access to refunds, though contractual arrangements could influence how recovered funds are shared.

As Luis Arandia Jr., partner at Barnes & Thornburg LLP, explains, “the refund process is basically triggered on who is the importer of record … the importers of record have the standing and have the chance to get the refund back.”

Understanding that distinction is essential for operators evaluating whether they have a financial stake in the refund process.

A central concept driving refund eligibility is “liquidation,” the point at which CBP finalizes duties owed on an imported entry.

The attorneys outlined three categories of entries:

• Unliquidated entries: Duties are not yet finalized and are most likely to be refunded automatically if the process moves forward.
• Liquidated but not final entries: These may still be eligible for refunds through a process called reliquidation.
• Finally liquidated entries: An entry if it’s 181 days after the liquidation date and there’s been no protest.

This timeline creates urgency. Importers nearing protest deadlines may need to take action now to preserve their rights, even as the broader refund mechanism remains unsettled.

At the center of the current uncertainty is CBP’s proposed refund mechanism, known as CAPE (Consolidated Administration and Processing of Entries), which would operate within the agency’s ACE (Automated Commercial Environment) system. It’s estimated to be 70% complete.

Under this proposal, importers would:

1. Submit a list of affected entries through ACE
2. Undergo system validation of those entries
3. Trigger automated liquidation or reliquidation
4. Receive refunds electronically via authorized bank accounts

While the court has indicated the system appears efficient, it has not yet been formally approved. Notably, the proposal requires affirmative action by importers, which differs from an earlier court directive suggesting refunds could be handled automatically.

“This is a very kind of fluid situation,” Arandia cautions. “Nothing’s been approved yet on the IEEPA refund process.”

Despite the lack of final guidance, legal experts emphasize that businesses should not wait. Recommended steps include:

• Secure ACE access: Importers should establish or verify their ACE accounts immediately.
• Gather documentation: Compile entry summaries, invoices, bills of lading and proof of duty payments.
• Analyze exposure: Identify which entries fall into each liquidation category.
• Monitor deadlines: Pay close attention to protest windows, particularly for entries nearing final liquidation.

Arandia stresses the importance of preparation, noting that “getting access to the ACE importer account is imperative, absolutely necessary.” It can be done free of charge, he says.

For many smaller operators who rely on distributors or brokers, this may require closer coordination with supply chain partners to understand who holds importer-of-record status.

The magnitude of the refund process is unprecedented. CBP estimates that more than 300,000 importers paid over $166 billion in IEEPA duties across approximately 53 million entries. Processing refunds could require adjustments to billions of data points — an effort that, if handled manually, would demand millions of labor hours.

Even with automation, the process could take years.

“What we’re talking about here is probably in the neighborhood of $200 billion … this process is not going to happen quickly,” Arandia says. “We’re in it for the long haul.”